How complex are networks playing repeated games?

Hao Li and Inkoo Cho

Economic Theory, 1999, vol. 13, issue 1, 93-123

Abstract: This paper examines implications of complexity cost in implementing repeated game strategies through networks with finitely many classifiers. A network consists of individual classifiers that summarize the history of repeated play according to a weighted sum of the empirical frequency of the outcomes of the stage game, and a decision unit that chooses an action in each period based on the summaries of the classifiers. Each player maximizes his long run average payoff, while minimizing the complexity cost of implementing his strategy through a network, measured by its number of classifiers. We examine locally stable equilibria where the selected networks are robust against small perturbations. In any locally stable equilibrium, no player uses a network with more than a single classifier. Moreover, the set of locally stable equilibrium payoff vectors lies on two line segments in the payoff space of the stage game.

Keywords: Network; ·; Complexity; ·; Repeated; games. (search for similar items in EconPapers)
Date: 1998-12-04
Note: Received: May 9, 1997; revised version: November 18, 1997
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.de/link/service/journals/00199/papers/9013001/90130093.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:13:y:1999:i:1:p:93-123

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().